The National Association Homebuilders (NAHB) reported that 22% of builders cut home prices in April.
According to the report, builders cut prices in an attempt to entice buyers and up sales numbers, as well as lessen any cancellations that present or potential buyers would otherwise be forced to go through due to a sudden change in finances post-COVID-19.
Among the 22%, data revealed that where builders were located affected the statistics greatly. Specifically, builders living within the south accounted for roughly 26% of those who cut home prices, followed by 23% of builders hailing from the midwest.
Fewer builders located in the west and northeast regions of the U.S. made any move regarding home prices, with the west only having 13% of its builders bending to adjust prices, and the northeast’s builders only reporting 12% among them switching things up with home costs.
This total percentage of builders who reduced prices is a statistic that is well below the share experienced in the nation’s last housing recession. In fact, the 22% is less than half of the 52% experienced in May 2007 and 49% that was seen in March 2008.
Among the 22% of builders who cut price tags, the average actual amount of decrease in cost was 5%, a much smaller cut than the last recessions of May 2007 or March 2008 as well. May 2007 reported 7%, while March 2008 reported 8%.
The NAHB previously reported that builder confidence in the market for newly-built single-family homes rose an impressive seven points to 37.
Experts explain that this stabilization and present positive sentiment among builders could most likely be attributed to the fact that home construction was considered “essential,” which allowed workers in the residential construction industry to continue working and earning, even amid the worst of the recent lockdown crisis.
The NAHB recently reported that the overall costs for residential construction materials fell more than ever recorded in April. Prices paid for industry fell 4.1%.